CLIConline

Iceland Mulls EU Move

Posted by Portia Nicholson from Cardiff - Published on 03/07/2009 at 12:53
1 comments » - Tagged as People, Topical

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Portia Nicholson

(Cardiff girl currently in Reykjavik, Iceland)

Iceland has made the first tentative steps towards joining the European Union after the small island was rocked last year by financial turmoil.

The new Icelandic Prime Minister, Johanna Sigurdardottir, previously announced that she would present a bill to parliament authorising the start of membership talks with Brussels.

When Sigurdardottir’s party, the Social Democrats, won the Icelandic general election she said, "We want Iceland as soon as possible to join the European Union and adopt the euro".

The bill on Icelandic accession talks with the European Union was recently submitted to the Icelandic parliament. It asks parliament to grant the government authority to begin accession talks with the EU under the explicit understanding that the nation will be able to vote on the final treaty of accession in a referendum.

Traditionally Euro-sceptic, Icelanders had expected this move from their Prime Minister, as many believe that joining the EU and ultimately adopting the Euro, is the only way to save their damaged economy.

The severe economic and social situation in Iceland urgently requires the new government to take rapid measures in order to tackle the crisis.

The country’s central bank, has projected that unemployment could rise to 11 per cent in the beginning of 2010, a huge increase on it’s previous figures of 1-2 per cent and GDP (Gross Domestic Product) could shrink by as much as 10 per cent.

EU Enlargement

There have been many reports of Iceland being fast tracked into the EU membership. EU enlargement commissioner Olli Rehn said, if Iceland submits its candidature it could join with Croatia as soon as 2011. When asked about Iceland’s membership Rehn said “Iceland is a democratic European country which fulfils all the political conditions for membership. Nonetheless, it depends on the Icelandic citizens whether they want to enter EU or not. However, if they apply for membership, the negotiations will not be long.”

Iceland has already adopted two-thirds of EU rules due to it’s European Economic Area status, so its accession talks could, in theory, proceed much faster than the five years Croatia has spent negotiating.

Since the banking crisis and the hugely devalued Icelandic krona, public support for joining the EU and adopting the Euro has increased dramatically.

Since January, Iceland’s currency has devalued around 40 percent, creating widespread concern among Icelanders regarding about the safety of their savings and their now fragile economy.

The head of Iceland's Institute of Economic Studies, Gunnar Haraldsson said, "Icelanders are starting to have doubts about their krona. An increasing number think the only solution is to act with other countries and not in isolation,"

Iceland has never applied for EU membership but Haraldsson said the turnaround in public opinion could in fact, be permanent.

Support from Scandinavia

The prime ministers of the other Nordic countries have declared that they are prepared to provide assistance during Iceland’s preparations for membership negotiations with the EU. Sweden will have the EU presidency for six months starting this July.

Sweden’s Foreign Minister Carl Bildt has announced that his country is willing to prioritise Iceland’s EU membership application if they choose to apply.

Prime Minister of Denmark Lars Loekke Rasmussen said it was pleasing that Iceland’s membership process would begin during Sweden’s EU presidency and be completed while Denmark served that future role in 2012.

Icelanders fear for fisheries

If Iceland were to apply for EU membership, an area that could need extensive negotiation with the commission is the fishery dossier. Fishing accounts for the majority of Iceland’s export income and is considered the backbone of the Icelandic economy. Icelanders fear the EU wants to grab some of their fish through the common fisheries policy.

Exemption from the fisheries policy is unlikely to be an option for Iceland, mainly as future EU Applicants would expect similar treatment. However with careful negotiation Iceland may win transitional arrangements, perhaps along the lines of national subsidies permitted for far-northern Finnish and Swedish farms.

"We fought for fisheries rights, and those who of us who remember those times perceived it as a continuance of our independence struggle," says fisheries minister Einar Gudfinnsson, who strongly opposes EU membership. "If we do not fare well in the fishing industry, that has a direct impact on the development of living standards in this country."

Iceland has managed its extensive fisheries so far with success, especially when compared to the EU's Common Fisheries Policy, which has been criticised for failed to control vast overfishing and the government subsidies that fuel it.

As a result, much of the cod now eaten in the US and Europe is caught by the profitable, unsubsidised Icelandic fleet.

While its unclear if the EU would grant Iceland any concessions regarding its fisheries, it does appear to welcome Iceland with open arms. Rehn has made it clear the EU "could quickly complete the negotiations" if Iceland applied for membership this year. Even with a fast tracked membership the process is going to be time consuming, especially as Iceland is likely to face a hard battle over it’s precious fisheries.

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